Japanese Government Study Shows Anime 'Piracy' Could Boosts Sales

from the but-but-but-piracy! dept

Just as a whole bunch of folks have been sued in one of these mass copyright infringement shakedown lawsuits over sharing of Funimation anime, it seems worth pointing out that a new Japanese government study on the impact of unauthorized file sharing of anime has concluded that unauthorized copies of anime often appear to increase DVD sales. The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan. The study found a very strong impact from YouTube -- even saying that it appears many people learn about potential anime DVDs by watching the videos on YouTube first. With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales. Of course, the study only looks at the correlation of videos appearing online and sales, rather than proving any causal link, so it's possible that other variables are involved. At the very least, though, this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

Reader Comments

Try Before You Buy

Which is why, where possible, I try to include a link to the official DVD release in my video descriptions at YouTube. It would be a LOT easier to do if they weren't region encoded or "only available in [X] country" (or deleted for that matter!) - If people like something enough, they usually buy it! I've got a small legion of fans of one show dying for a DVD release so they can buy it.

I don't really buy this

At least in my case...I've never really bought anime dvds. When I first started working, I was like "Gee, I've got money now", so the first thing I did was pop round to Forbidden Planet and buy the Platinum DVDs of Evangelion. They weren't good value, FP was selling a 3 episode disc for 30 euro. Ended up spending over 240 euro to get the entire series. After that, I got my first internet connection and discovered the joys of torrenting and cyberlockers.
I did watch one thing on Youtube a couple years ago that actually sounded like a great idea to make money from downloaded shows. I can't find the link, otherwise I'd post it, but what the guy said was, just put an advertisement logo in the corner. Something small and unobtrusive, but it would work. He put in the Nike swoosh logo on an episode of a popular tv show. Get the advertisers to pay for the show: the more popular it is, the more it is downloaded, the more the show's producers could then charge for advertising. And all of that without the end users worrying about litigation or their conscience getting in the way.

And let us not forget

That is was piracy that started the anime craze in the US in the first place. People were bringing in bootlegged VHS tapes of anime from Japan, someone saw there was an emerging market and decided to convert these goddawful evil bloodsucking pirates into customers, thus spawning the age of the English dubbed Anime. Strange, how an idea like this is never tried these days...must be against the copyright religion's Commandments or something.

With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales

this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

One of these things, is not like the other. One of these things...

Mike, don't you think if rental income drops that it won't lead to diminished sales and income? Let's say it's the old plastic disk rental thing. If they make less income, perhaps they buy less copies, right? If it's the more futuristic "PPV", would it not decrease the licensing fees?

If money is moving away from a business model because of piracy, is that not decreased sales?

Yes, there is some upside for the companies on youtube from out of market buyers, as they have no other way to be aware of the content. But the same results could be obtained with trailers, teasers, or other content hosting by the anime companies themselves. No need to put tons of full episodes out there, right? After all, as RikuoAmero mentions, as soon as he was able to download and not pay, there was little reason to pay the high price for imported discs.

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The high price was the only reason I don't buy anime dvds: if I downloaded the show, I got exactly what was on the DVD for no cost: hell, I even downloaded ISO DVD rips of Haruhi Suzumiya, that were a complete recreation of the actual DVD.

But don't think I'm a cheapskate by any reason. I buy tons of other content legally. I buy books, dvds, movies, games. I torrented Dragon Age Origins as soon as it came out, then went ahead and bought it once the expansion Awakening was released.
The point I was trying to make is that the goods are priced so high that no one wants to buy them. For example, I was at a computer store yesterday, and I saw copies of Adobe Flash and Photoshop CS5 going for literally ONE THOUSAND ONE HUNDRED AND NINETY NINE EURO. I paid 1100 for my entire computer. Here, I saw a product that is in high demand (when was the last time you were on a website that didn't make use of Flash in some way?) and basically infinite supply (its 1's and 0's, easy to reproduce), and yet, they're charging 1199? A clear case of not understanding the most basic principles of supply and demand.

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I am not implying a "complete decrease in sales or income", rather that this study seems to suggest that inside the Japanese market, sharing (on Winny) has a negative impact on at least the rental market.

When put against the title of the piece, " Anime 'Piracy' Could Boosts Sales", it seems like actual facts are being ignored.

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The rental market for video is declining in general as rental outlets in the US fall victim to Netflix and streaming services. The decline in the rental income seen in the study may actually reflect the evaporation of the rental distribution channel.

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But does this even matter? Unless the anime industry is also in the rental industry, the anime companies have zero responsibility to care about the bottom line of rental shops. Pointing out the diminished sales of rental shops when it doesn't affect the bottom line of the anime industry in the slightest means nothing.

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Actually the anime industry should be happy, since they get far less revenue from the rental industry than they do from selling at retail. Most video stores would have at most a dozen copies of the latest films, so the studio would only get a dozen sales, but the rental store would rent out those copies potentially hundreds of times over the lifetime of the disk.

A decrease in the rental industry and an increase in DVD sales is a win for the anime industry.

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Actually it makes sense. Those people who only rent are those who would probably have watched it only once anyway. These people have their needs met by piracy. A portion of those who buy in the first place are die hard fans that simply have to own. You can throw the pirated copies in their faces and they'll consume it readily but will still want to buy even then. Piracy in this case cannot meet all their needs. Stupid irrational fans.
I know because I'm one of them.

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If you have 100 people and each of them rent the same copy of "X" movie, and then instead of renting "Y" movie they all see it on YouTube, then BUY the box set of "Y" movie, which movie has a greater sales volume?

1!>100

Because of this you can say that sales are up even though rentals are down.

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>The study found a very strong impact from YouTube -- even >saying that it appears many people learn about potential >anime DVDs by watching the videos on YouTube first. With >Winny, the impact wasn't as strong, and could decrease >rental income, but did not decrease DVD sales.

im probably not a reference but that makes sense to me, i still buy DVDs as a matter of fact id rather buy than download (if its a good movie and available for sale in my country).

It is worth pointing out that most anime DVDs/Blu ray discs in Japan these days comes with tons of extras. At the very least you are usually looking at several pieces of merchandise, such as figures, art books, OSTs, etc. If rentals are down and sales are up as a result of piracy, the most likely explanation is that people want the physical extras that come with these releases. The sales are likely up because you have more people seeing the show thanks to piracy, and later deciding to buy thanks to all the extras. If you are renting though you aren't renting for extras and instead just to watch, so it makes sense that piracy would decrease the revenue created through rentals because piracy is a more effective replacement.

It is worth pointing out that most anime DVDs/Blu ray discs in Japan these days comes with tons of extras. At the very least you are usually looking at several pieces of merchandise, such as figures, art books, OSTs, etc. If rentals are down and sales are up as a result of piracy, the most likely explanation is that people want the physical extras that come with these releases. The sales are likely up because you have more people seeing the show thanks to piracy, and later deciding to buy thanks to all the extras. If you are renting though you aren't renting for extras and instead just to watch, so it makes sense that piracy would decrease the revenue created through rentals because piracy is a more effective replacement.

DVDs aren't the only things to sell

Something these studios should also check is how well their sales of licensed merchandise aside from DVDs. Sure, in Japan DVD box sets can come with some other stuff like art books and the like, but these companies also license their characters and IP for any number of additional merchandise.

We must look into this franchise on its own terms. I find it to be all too common that many who pirate the DVD content will still purchase alternative merchandise later on if they enjoyed the show enough.

I would love to see a study done comparing the DVD sales and the piracy of the content compared to sales of non-DVD merchandise. That could be very telling of what other media industries might want to do for a new business model in the future.

Re: DVDs aren't the only things to sell

I would love to see a study done comparing the DVD sales and the piracy of the content compared to sales of non-DVD merchandise. That could be very telling of what other media industries might want to do for a new business model in the future

I think that is a short term way to look at things. Merchandising is taking a "want product" and replacing it with a "want want product" (you have to want the dvd, and then also want the merchandise to go with it). As a bonus as part of buying the DVD (the original want product), it is a good way to continue to encourage the sort of consumer behavior you want without burning down your DVD sales market. But it should always be in support of your goal, and not counter to it.

Breakfast cereal companies has done this for years, with all sorts of give aways and promotions "inside the box", with the continued goal of encouraging people to buy their productions. You don't see free cereal if you buy a t-shirt, right? ;)

It always pays to pay attention to what consumers as a whole truly desire, not just what a few of them may buy.

"The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan."

Something of interest is that Winny, along with it's successors Share and Perfect Dark, give a sneak preview where other countries are going as penalties for copyright infringement become steeper. While it is true that in Japan, downloading content was legal, uploading of content has been illegal for quite some time. Furthermore, it's not just a civil matter, dozens of casual uploaders of TV shows have been arrested. In response, Winny was originally created to be a secured P2P file sharing system, where file sharing would take place without exposing your ip to the internet at large. This was cracked by law officials, and later the more secured Share was created in response. Years later, as Share was cracked for the first time, yet another new system, Perfect Dark was created and is replacing Share's role. Rather than halting piracy, the steeper penalties for copyright infringement in Japan have instead lead to an arms race between those using P2P and those enforcing stronger copyright laws.

The benefit of piracy to anime is something most of us anime-watchers have known for many, many years.

And no, I'm not just being a freetard, anime studios in Japan have actually come out and said "Thanks" before to piraters.

I just watched it, so it comes to mind, and in Battle Programmer Shirase, in the last episode, the main character actually thanks, "All the people who watched, all the people who took special efforts to watch outside of the original broadcast zone or time, and all of the people watching it subtitled overseas without permission".

And, of course, as someone mentioned, the only reason we have anime over here in the US at all, (or an anime market worth, y'know, many many millions every year), is because of piracy.

On a related note...

Online piracy of the manga (and anime) of the show Naruto greatly increased the fanbase and actually lead to a rapid increase in the release schedule for translated volumes of the comic a few years back.

Funimation, a major importer of anime in the US, has partnered with Hulu to display a sizable chunk of their catalog online, with links to where people can buy it if they like it.

Value

Off the top of my head, I can think of almost a dozen cartoons from Nickelodeon (owned by Viacom) that are blocked from YouTube, not readily available on DVD and are not on TV. So the value of those cartoons is zero.

Now if those same cartoons were on YouTube (which in itself can make Viacom a little bit more money from YouTube advertisements) and available on DVD, somebody could think "Oh, I'd like to see [X] show again", find it on YouTube, watch it (for free), enjoy it, spot the link to the DVD release in the video description and buy it. The value of those cartoons would be more than zero.

The important part about the fan subtitles (fansubs) is that it is introducing the product (anime) to new markets and creating a fanbase (demand) for it before it is even available. What business person turns down measureable, free, demand in a new market. This differs from the scenario of file sharing the same product in Japan where it is available. Since the fansub groups can churn out a subtitled download of a new episode within the day of airing, there is demand to keep up to date with the series so people download it. What they need to do is coordinate to air a dubbed within a week of airing in japan to cut down downloading by meeting the desire of their consumer. I used to watch fansubs of anime ALL the time when I was in college. Now I have money, and a fiancÚ who doesn't want to read subtitles, so I have a wall of anime series. The thing is I refuse to pay $40 for 6 episodes or $100 a season, but a few companies are finding the right price point. There has a been a large increase in complete series ( usually 2 season ~24/26 episodes) for $30-$40 dollars. I mean really, your not fooling anybody that came from fansubs that your just licensing and then usually but not always, hiring some voice actors to read a translated script(which with fansubs is already given to you). Really, how brilliant do you have to be to work with that business model, your not even dealing with real content creation. License + translator + random voice actor = money!(if you don't get full of yourself and charge to much)

As for funimation, that company sided with quantity over quality, which with the large demand and for a long time, very little competition, worked out well for them. I am certainly glad to see more competition especially siding with quality and decreased prices. Quality being alot of things such as good voice actors (that are not recycled for every series), proper translations (really, don't market a show with loads swearing and rewrite it for a children's network), and being timely in releases. My largest problem with funimation is they licence a series, do not release a product for years, meanwhile strongarm fan groups with legal threats and C&D's to crush their fanbase of a future product. Way to build resentment toward your company, you should give whoever thought of that one a bonus. Oh, and because the demand doesn't go away, fangroups that the won't listen to funimation spring up, provide fansubs, and the fans hate the company so they refuse to support the official product when it comes out. For awhile, funimation was sending C&D's on behalf of japanese companies they work with, not even for material funimation licenced. Really now? Why try harder to get rid of customers and at that, those with the highest demand and created the market for your product.

Works for me.

I don't get cable anymore but when I heard there was a new FMA reboot i went looking on the net for info. I found FA had put the 1st few episodes online. I like what i saw so i started buying the blue rays (3 so far). its comes out to be about 2.70 an show so about the same as HD itunes or amazon. And I have a disk I can resell if i get sick of it.